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Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
Saudi Arabia Country Report   Mobile Handset Installed Base 2012-2016
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Saudi Arabia Country Report Mobile Handset Installed Base 2012-2016

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- Worldwide Smartphone shipments will cross the 1 billion mark in 2016, reaching 1,095 million, and account for 51 percent of total handset shipments in that year. …

- Worldwide Smartphone shipments will cross the 1 billion mark in 2016, reaching 1,095 million, and account for 51 percent of total handset shipments in that year.
- The increasing penetration of Smartphones bodes well for both operators and handset vendors. It helps an operator to get subscribers onto bundled plans, which strengthens ARPU, and reduces churn. Furthermore, migration of subscribers from feature phones and basic handsets to Smartphones helps handset vendors strengthen their revenue.
- Smartphones accounted for around 31 percent of total handset shipments during the full year 2011. This figure is expected to reach 39.1 percent in 2012. Moreover, by 2016, more than half (51 percent) of total handset shipments will be Smartphones.
- It is estimated that the number of Smartphone users will cross the 3-billion mark by 2016, up from 770 million as of end-2011. However, Non-Smartphone users will continue to overshadow Smartphone users year-on-year, and would be a substantial category during the same period. It is estimated that the Non-Smartphone user base that stood at 5.20 billion as of end-2011, will reach 5.41 billion by end-
2016, after peaking at 5.48 billion by end-2014.

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  • 1. DI AU S IA AB AR
  • 2. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia 2 © 2013, Portio Research. All Rights Reserved
  • 3. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Portio Research Limited. Published November 2012 by Portio Research Limited © Copyright 2013. www.portioresearch.com info@portioresearch.com Disclaimer and Legal Notices Disclaimer Every care has been taken in the preparation of this study to ensure that the information contained herein is accurate, factual and correct to the best of our knowledge, at time of publishing. All opinions, suppositions, estimates and recommendations included in this document are solely the opinions of the authors unless otherwise stated. Portio Research Limited accepts no liability for any loss or damage or unforeseen consequential loss or damage arising from the use of the information contained within this document. The opinions, suppositions, estimates and recommendations within this document cannot be guaranteed, and readers use this information at their own risk. The information published in this document is subject to change without notice at any time, and Portio Research Limited accepts no liability or obligation to inform the reader of such changes. Portio Research Limited do not promote or endorse any specific companies or products, the views and opinions we express in this document are wholly our own assessments, and independent from any external interest or influence. Many terms and phrases and trade names used in this document are proprietary and Portio Research Limited recognises and acknowledges that all trademarks are copyright, belonging to their respective owners. Where possible, this document accords such terms and phrases and trade names to their respective owners. All Rights Reserved. No part of this document can be copied, shared, redistributed, transmitted, displayed in the public domain, stored or displayed on any internal or external company or private network or electronic retrieval system, nor reprinted, republished or reconstituted in any way without the express written permission of the publisher. Forwarding of this electronic document without the correct legal licence is theft. It’s unethical, immoral and against the law. If you have any questions about the legal licence conditions under which this document has been distributed, please contact Portio Research on info@portioresearch.com If you did not buy this document and a colleague or associate has sent it to you, do not assume you are legally entitled to read it, it is your responsibility to ensure you have the correct legal licence to read this document. © 2013, Portio Research. All Rights Reserved 3
  • 4. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Contents Mobile Installed Base – Worldwide ........................................................................................7 Non-Smartphone Installed Base Regional Snapshot ......................................................................... 13 Smartphone Installed Base Regional Snapshot................................................................................. 15 Europe ............................................................................................................................................... 19 Asia Pacific ........................................................................................................................................ 20 North America .................................................................................................................................... 21 Latin America ..................................................................................................................................... 22 Middle East & Africa........................................................................................................................... 23 Mobile Installed Base – Saudi Arabia ..................................................................................25 Summary and Conclusion .....................................................................................................29 Appendices .............................................................................................................................36 Glossary .......................................................................................................................................... 37 Portio Research Classifications ....................................................................................................... 47 About the Authors............................................................................................................................ 48 Also available from Portio Research Limited ..................................................................................... 49 4 © 2013, Portio Research. All Rights Reserved
  • 5. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17: Figure 18: Figure 19: Figure 20: Figure 21: Figure 22: Figure 23: Figure 24: Figure 25: Figure 26: Figure 27: Figure 28: Figure 29: Figure 30: Figure 31: Figure 32: Figure 33: Figure 34: Figure 35: Figure 36: Mobile Subscribers Classification ....................................................................................................... 7 Mobile Installed Base – Definitions ..................................................................................................... 8 Mobile Handset Shipments – Worldwide (In Million, 2011 – 2016F) .................................................. 9 Smartphone Shipments – Worldwide (In Million, 2011 – 2016F) ........................................................ 9 Smartphones’ Contribution to Overall Handset Shipments – Worldwide (In Percent, 2011, 2012E & 2016F) .............................................................................................................................................. 10 Mobile Installed Base – Worldwide (In Million, End 2011 – End 2016F)........................................... 11 Mobile Installed Base Penetration by Type – Worldwide (In Percent, 2011, 2012E & 2016F) ........ 12 Mobile Installed Base Penetration by Type – Worldwide (In Percent, End 2011 – End 2016F) ....... 13 Non-Smartphone Installed Base – Regional Snapshot..................................................................... 14 Non-Smartphone Installed Base – Regional Contribution (In Percent, End-2011, End-2012E & End2016F) .............................................................................................................................................. 15 Smartphone Installed Base – Regional Snapshot ............................................................................ 16 Smartphone Installed Base – Regional Contribution (In Percent, End-2011, End-2012E & End2016F) .............................................................................................................................................. 17 Mobile Installed Base – Europe (In Million, End 2011 – End 2016F) ................................................ 19 Mobile Installed Base Penetration by Type – Europe (In Percent, End 2011 – End 2016F) ............. 19 Mobile Installed Base – Asia Pacific (In Million, End 2011 – End 2016F) ......................................... 20 Mobile Installed Base Penetration by Type – Asia Pacific (In Percent, End 2011 – End 2016F) ...... 20 Mobile Installed Base – North America (In Million, End 2011 – End 2016F) .................................... 21 Mobile Installed Base Penetration by Type – North America (In Percent, End 2011 – End 2016F) . 21 Mobile Installed Base – Latin America (In Million, End 2011 – End 2016F) ..................................... 22 Mobile Installed Base Penetration by Type – Latin America (In Percent, End 2011 – End 2016F) .. 22 Mobile Installed Base – Middle East & Africa (In Million, End 2011 – End 2016F) ........................... 23 Mobile Installed Base Penetration by Type – Middle East & Africa (In Percent, End 2011 – End 2016F) .............................................................................................................................................. 23 Non-Smartphone Installed Base – Saudi Arabia (In Million, End 2011 – End 2016F) ...................... 25 Smartphone Installed Base – Saudi Arabia (In Million, End 2011 – End 2016F) .............................. 25 Contribution to Regional Non-Smartphone Base – Saudi Arabia (In Percent, End 2011 – End 2016F) .............................................................................................................................................. 26 Contribution to Regional Smartphone Base – Saudi Arabia (In Percent, End 2011 – End 2016F) ... 26 Mobile Installed Base Penetration by Type – Saudi Arabia (In Percent, End 2011 – End 2016F) .... 27 Mobile Installed Base – Worldwide (In Million, 2011 & 2016F) ......................................................... 29 Non-Smartphones Installed Base Snapshot – Worldwide (In Million, 2011 - 2016F)........................ 30 Smartphones Installed Base Snapshot – Worldwide (In Million, 2011 - 2016F) ............................... 30 Mobile Installed Base Trend – Worldwide (End 2011 – End 2016F) ................................................ 31 Mobile Installed Base Trend – Europe (End 2011 – End 2016F)...................................................... 32 Mobile Installed Base Trend – Asia Pacific (End 2011 – End 2016F)............................................... 32 Mobile Installed Base Trend – North America (End 2011 – End 2016F) .......................................... 33 Mobile Installed Base Trend – Latin America (End 2011 – End 2016F) ........................................... 33 Mobile Installed Base Trend – Middle East & Africa (2011-2016F) .................................................. 34 List of Tables Table 1: Table 2: Non-Smartphone Installed Base – Regional and Worldwide (In Million, End 2011 – End 2016F) .... 14 Smartphone Installed Base – Regional and Worldwide (In Million, End 2011 – End 2016F)............ 16 © 2013, Portio Research. All Rights Reserved 5
  • 6. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Chapter 1 Mobile Installed Base – Worldwide 6 © 2013, Portio Research. All Rights Reserved
  • 7. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Mobile Installed Base – Worldwide Mobile penetration worldwide crossed the 85 percent mark in the year 2011. With the industry witnessing stagnation in developing markets, and experiencing low growth in emerging markets, the focus of MNOs worldwide is to enlarge their product and service portfolio, offering high speed data services to their subscribers. This change has been equally supported by mobile handset vendors, who have launched an array of advanced handsets in the recent past. In this entire framework, mobile subscribers can be broadly classified into two categories: Figure 1: Mobile Subscribers Classification Subscribers using Smartphones Subscribers not using Smartphones Worldwide Mobile Subscriber Base Source: Portio Research Ltd. The figure below defines the key terminologies and assumptions used to arrive at the data points presented in the report. © 2013, Portio Research. All Rights Reserved 7
  • 8. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 2: Mobile Installed Base – Definitions Non Smartphones • Non Smartphones include Basic Handsets and Featurephones. • Basic Handsets: Mobile handsets with only voice and sms capabilities • Featurephones: Mid-level mobile handsets with camera and Internet browser and ability to run apps based on JAVA ME and BREW platform Smartphones • A smartphone is a handset that is based on an Operating System that allows it to run applications. A smartphone is capable of downloading and running applications that includes third -party applications and has its own built in memory. Furthermore, just like a PC, a smartphone has a processor and RAM and is able to run multiple applications simulatenously. Mobile Subscribers • Active SIMs as reported by the opertors worldwide. "Total subscribers" for a network/country or globally, is the count of the total number of active subscriptions those networks have. Mobile Handset Shipments • Total number of primary shipments made by the mobile handset vendors to a market/geography. Handset Replacement Rate • Annual rate at which the existing mobile subscribers change/upgrade their handsets. Mobile Installed Base • Total number of active devices- Smartphones /Non-Smartphones in a country/region as a cumulative total Source: Portio Research Ltd. The mobile handset industry is expected to continue its growth phase in the foreseeable future. The overall market will grow at a CAGR of 6.8 percent during the period 2011-2016 and the number of annual handset shipments will cross 2 billion in the year 2015. Overall handset shipments are expected to reach 2.1 billion in the year 2016. The figure below shows total handset shipments for the period 2011 to 2016. 8 © 2013, Portio Research. All Rights Reserved
  • 9. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 3: Mobile Handset Shipments – Worldwide (In Million, 2011 – 2016F) Mobile Handset Shipments (In Million) 2,700 2,200 1,700 1,549 1,674 1,819 1,947 2,148 2,056 1,200 700 200 2011 2012E 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. E – Estimated , F – Forecast Furthermore, worldwide Smartphone shipments will cross the 1 billion mark in 2016, reaching 1,095 million, and account for 51 percent of total handset shipments in that year. The figure below shows Smartphone shipments for the period 2011-2016. Figure 4: Smartphone Shipments – Worldwide (In Million, 2011 – 2016F) Smartphone Shipments (In Million) 1,200 1,095 968 1,000 858 752 800 655 600 485 400 200 2011 2012E 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. E – Estimated , F – Forecast The increasing penetration of Smartphones bodes well for both operators and handset vendors. It helps an operator to get subscribers onto bundled plans, which strengthens ARPU, and reduces churn. Furthermore, migration of subscribers from feature phones and basic handsets to Smartphones helps handset vendors strengthen their revenue. Smartphones accounted for around 31 percent of total handset shipments during the full year 2011. This figure is expected to reach 39.1 percent in 2012. Moreover, by 2016, more than half (51 percent) © 2013, Portio Research. All Rights Reserved 9
  • 10. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia of total handset shipments will be Smartphones. The figure below highlights the contribution of Smartphones to overall handset shipments for the years 2011, 2012 and 2016. Figure 5: Smartphones’ Contribution to Overall Handset Shipments – Worldwide (In Percent, 2011, 2012E & 2016F) 2011 2012E 31.3% 39.1% 60.9% 68.7% 2016F 51.0% 49.0% Smartphone Shipments Non Smartphone Shipments Source: Portio Research Ltd. E – Estimated , F – Forecast While the shipments of Smartphones are stealing a march over those for the Non-Smartphone category, the installed base of Non-Smartphones is still significant, and cannot be overlooked by players in the wireless ecosystem. 10 © 2013, Portio Research. All Rights Reserved
  • 11. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia The figure below shows the mobile installed base for the period 2011-2016. Figure 6: Mobile Installed Base – Worldwide (In Million, End 2011 – End 2016F) 10,000 8,000 Installed Base (In Million) 2,030 3,067 1,555 2,539 1,131 5,198 5,381 5,460 5,481 5,458 5,412 2011 6,000 2012E 2013F 2014F 2015F 2016F 770 4,000 2,000 0 Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast It is estimated that the number of Smartphone users will cross the 3-billion mark by 2016, up from 770 million as of end-2011. However, Non-Smartphone users will continue to overshadow Smartphone users year-on-year, and would be a substantial category during the same period. It is estimated that the Non-Smartphone user base that stood at 5.20 billion as of end-2011, will reach 5.41 billion by end2016, after peaking at 5.48 billion by end-2014. The figure below shows the penetration of Smartphones and Non-Smartphones at the global level. Smartphone users constituted only 12.9 percent of the total mobile user base at the end of 2011. This figure is expected to increase 450 basis points and reach 17.4 percent by end-2012. Furthermore, by end 2016, Smartphone users will constitute more than one-third of the subscriber base; close to 64 percent of the worldwide subscribers will still not be using Smartphones. © 2013, Portio Research. All Rights Reserved 11
  • 12. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 7: Mobile Installed Base Penetration by Type – Worldwide (In Percent, 2011, 2012E & 2016F) 2012E 2011 17.4% 12.9% 82.6% 87.1% 2016F 36.2% 63.8% Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast The figure below highlights the penetration of the two categories of handsets in use – Smartphones and Non-Smartphones at the worldwide level for the period 2011-2016. 12 © 2013, Portio Research. All Rights Reserved
  • 13. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 8: Mobile Installed Base Penetration by Type – Worldwide (In Percent, End 2011 – End 2016F) 120% Penetration (In Percent) 100% 12.9% 17.4% 22.2% 27.0% 31.8% 36.2% 77.8% 73.0% 68.2% 63.8% 2014F 2015F 2016F 80% 60% 40% 87.1% 82.6% 20% 0% 2011 2012E 2013F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast Non-Smartphone Installed Base Regional Snapshot At the regional level, the Asia Pacific region was the largest contributor to the overall Non-Smartphone base at the end of 2011, followed by Europe. We estimate that nearly 2.7 billion subscribers in Asia Pacific were using a handset that was not a Smartphone at the end of 2011. That figure is expected to increase to 3.2 billion by end-2016, emphasizing the importance of this category in the region. During the period 2011-2016, geographies such as Europe, North America and Latin America are expected to witness a decline in the installed base of Non-Smartphones. On the other hand, Asia Pacific, and Middle East & Africa regions will see a rise in the number of Non-Smartphone handset users. This trend is highlighted in the figure below. © 2013, Portio Research. All Rights Reserved 13
  • 14. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 9: Non-Smartphone Installed Base – Regional Snapshot Source: Portio Research Ltd. Table 1 below shows the regional Non-Smartphone installed base for the period 2011-2016. Table 1: Non-Smartphone Installed Base – Regional and Worldwide (In Million, End 2011 – End 2016F) Non-Smartphone Installed Base (In Million, Year end) Region 2011 2012E 2013F 2014F 2015F 2016F Europe 878 826 761 693 624 559 Asia Pacific 2,744 2,950 3,087 3,179 3,229 3,244 North America 247 224 198 173 150 130 Latin America 544 546 542 528 509 489 Middle East & Africa 785 835 872 909 946 991 Total 5,198 5,381 5,460 5,481 5,458 5,412 Source: Portio Research Ltd. 14 © 2013, Portio Research. All Rights Reserved
  • 15. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia As of the end of 2011, Asia Pacific contributed 52.8 percent to the global Non-Smartphone installed base, followed by Europe whose contribution stood at 16.9 percent. As of end 2012, it is estimated that Asia Pacific will strengthen its hold in this category and its contribution will rise to 54.8 percent. Barring Middle East and Africa, the contribution of all the other regions will decline. This trend is expected to continue through to 2016, with Asia Pacific constituting nearly 60 percent of the global Non-Smartphone Installed Base. The figure below shows the percentage contribution by region at the end of years 2011, 2012 and 2016. Figure 10: Non-Smartphone Installed Base – Regional Contribution (In Percent, End-2011, End-2012E & End2016F) 2012E 2011 54.8% 52.8% 15.3% 16.9% 4.8% Europe 15.5% 10.5% 15.1% Asia Pacific 10.2% Latin America North America 4.2% Middle East & Africa 2016F 59.9% 10.3% 18.3% 9.0% 2.4% Source: Portio Research Ltd. E – Estimated , F – Forecast Smartphone Installed Base Regional Snapshot In terms of Smartphone users, Asia Pacific leads its peers. At the end of 2011, 246 million subscribers in the region used Smartphones. This figure is expected to cross the 1-billion mark before the end of 2015, and further accelerate to 1.36 billion by the end of 2016. The bulk of this growth will be contributed by China and India. As of the end of 2011, the second largest region in terms of Smartphone users was Europe. Latin America stood at the last spot; nearly 80 million subscribers in the region used a Smartphone at the end of 2011. © 2013, Portio Research. All Rights Reserved 15
  • 16. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia The figure below highlights the Smartphone Installed base by region for end-2011 and end-2016. Figure 11: Smartphone Installed Base – Regional Snapshot Source: Portio Research Ltd. Smartphone Installed base by region for the period 2011-2016 is shown in the figures below. Table 2: Smartphone Installed Base – Regional and Worldwide (In Million, End 2011 – End 2016F) Smartphone Installed Base (In Million, Year end) Region 2011 2012E 2013F 2014F 2015F 2016F Europe 223 311 403 497 588 673 Asia Pacific 246 391 579 808 1,070 1,359 North America 110 151 192 233 271 305 Latin America 80 122 172 228 287 347 Middle East & Africa 111 157 209 265 323 383 Total 770 1,131 1,555 2,030 2,539 3,067 Source: Portio Research Ltd. 16 © 2013, Portio Research. All Rights Reserved
  • 17. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia As of end-2011, nearly 32 percent of the worldwide Smartphone users resided in Asia Pacific. Furthermore, contribution of Europe to the overall Smartphone installed base stood at 29 percent during the same year. It is estimated that by end-2012, the contribution of Asia Pacific will increase to 34.6 percent. Moreover, the contribution of North America will dip by 100 basis points and reach 13.3 percent by end-2012, from 14.3 percent as of end-2011. The share of the Middle East & Africa region will also decline during the same period. By 2016, nearly 44 percent of the market will be dominated by the Asia Pacific region, highlighting the fact that MNO’s operations in the region will need a comprehensive dual strategy to cater to the large base of both Smartphone and Non-Smartphone users in the region. Although the share of the North American region is expected to be the lowest, that whole market will tilt towards high-end handsets with nearly 70 percent of the subscribers in the region using a Smartphone by 2016. The figure below highlights the share of regions to the global Smartphone installed base at the end of years 2011, 2012 and 2016. Figure 12: Smartphone Installed Base – Regional Contribution (In Percent, End-2011, End-2012E & End2016F) 2012E 2011 31.9% 34.6% 27.5% 29.0% 13.9% 14.4% 13.3% 14.3% 10.7% 10.3% Europe Asia Pacific Latin America North America Middle East & Africa 2016F 44.3% 22.0% 12.5% 9.9% 11.3% Source: Portio Research Ltd. E – Estimated, F – Forecast © 2013, Portio Research. All Rights Reserved 17
  • 18. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Chapter 2 Mobile Installed Base – Regional 18 © 2013, Portio Research. All Rights Reserved
  • 19. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Europe Figure 13: Mobile Installed Base – Europe (In Million, End 2011 – End 2016F) 1,500 Installed Base (In Million) 1,200 900 223 311 403 497 588 673 826 761 693 624 559 2014F 2015F 2016F 600 300 878 0 2011 2012E 2013F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast • As of end-2011, Non-Smartphones contributed 80 percent to the total handset installed base in the region. The figure is expected to decline and reach 45 percent by end-2016. • During the period 2011 to 2016, the installed base of Non-Smartphones is expected to decline from 878 million to 559 million. Furthermore, the Smartphone installed base is expected to reach 673 million by end-2016, as compared to 223 million as of end-2011. • Europe contributed 17 percent to the global Non-Smartphone installed base at the end of year 2011. The corresponding figure is expected to decline to 10 percent at the end of year 2016. Figure 14: Mobile Installed Base Penetration by Type – Europe (In Percent, End 2011 – End 2016F) 100% 20% 27% Penetration (In Percent) 80% 35% 42% 49% 55% 51% 45% 2015F 2016F 60% 40% 80% 73% 65% 20% 58% 0% 2011 2012E 2013F 2014F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast © 2013, Portio Research. All Rights Reserved 19
  • 20. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Asia Pacific Figure 15: Mobile Installed Base – Asia Pacific (In Million, End 2011 – End 2016F) 5,000 Installed Base (In Million) 4,000 3,000 246 391 808 579 1,070 1,359 2,000 2,744 2,950 3,087 3,179 3,229 3,244 2011 1,000 2012E 2013F 2014F 2015F 2016F 0 Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast • Asia-Pacific Non-Smartphone installed base is estimated to peak only after end-2016. • Even by end-2016, Asia-Pacific alone is estimated to have more installed Non-Smartphones than installed Smartphones globally. It is expected that nearly 70 percent of the total handsets in the region will still be Non-Smartphones as of end-2016. • Primarily driven by growth geographies including China and India, the installed base of NonSmartphones is expected to reach 3.24 billion by end-2016. The corresponding figure for the year 2011 stood at 2.74 billion. Figure 16: Mobile Installed Base Penetration by Type – Asia Pacific (In Percent, End 2011 – End 2016F) 100% 8.2% 11.7% 15.8% 20.3% 24.9% 29.5% 79.7% 75.1% 70.5% 2014F 2015F 2016F Penetration (In Percent) 80% 60% 40% 91.8% 88.3% 84.2% 20% 0% 2011 2012E 2013F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast 20 © 2013, Portio Research. All Rights Reserved
  • 21. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia North America Figure 17: Mobile Installed Base – North America (In Million, End 2011 – End 2016F) 500 Installed Base (In Million) 400 300 110 151 192 247 224 198 233 271 305 173 150 130 2014F 2015F 2016F 200 100 0 2011 2012E 2013F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast • As of end-2011, close to 69 percent of the total handsets in the region belonged to the NonSmartphone category. The figure is expected to decline gradually during the next five years, and reach 30 percent as of end-2016. • North America will have the highest penetration of Smartphones in 2016 • The share of North America in the global Smartphone installed base is estimated to go down from 14 percent in 2011 to 10 percent in 2016. The corresponding figure for Non-Smartphone category was 5 percent in 2011 and is expected to decline and reach 2 percent as of end-2016. Figure 18: Mobile Installed Base Penetration by Type – North America (In Percent, End 2011 – End 2016F) 100% Penetration (In Percent) 80% 31% 40% 49% 57% 64% 70% 36% 30% 2015F 2016F 60% 40% 69% 20% 60% 51% 43% 0% 2011 2012E 2013F 2014F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast © 2013, Portio Research. All Rights Reserved 21
  • 22. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Latin America Figure 19: Mobile Installed Base – Latin America (In Million, End 2011 – End 2016F) 1,000 800 Installed Base (In Million) 122 172 228 287 347 80 544 546 542 528 509 489 2011 600 2012E 2013F 2014F 2015F 2016F 400 200 0 Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast • As of end-2011, Non-Smartphones contributed 87 percent to the total handset installed base in the region. The figure is expected to decline and reach 59 percent by end-2016. • During the period 2011 to 2016, the installed base of Non-Smartphones is expected to decline from 544 million to 489 million. Furthermore, the Smartphone installed base is expected to reach 347 million by end-2016, as compared to 80 million as of end-2011. • Latin America contributed 10 percent to the global Non-Smartphone installed base in the year 2011. The figure is expected to decline marginally and reach 9 percent by end-2016. Figure 20: Mobile Installed Base Penetration by Type – Latin America (In Percent, End 2011 – End 2016F) 100% 13% 18% 24% 30% Penetration (In Percent) 80% 36% 41% 64% 59% 2015F 2016F 60% 40% 87% 82% 76% 70% 20% 0% 2011 2012E 2013F 2014F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast 22 © 2013, Portio Research. All Rights Reserved
  • 23. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Middle East & Africa Figure 21: Mobile Installed Base – Middle East & Africa (In Million, End 2011 – End 2016F) 1,500 Installed Base (In Million) 1,200 900 111 157 209 383 323 265 600 835 872 909 946 991 785 2011 300 2012E 2013F 2014F 2015F 2016F 0 Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast • The Non-Smartphone installed base for Middle East & Africa (ME&A) is estimated to peak only after end-2016. • As of end-2011, nearly 88 percent of the total handsets in the region belonged to the NonSmartphone category. This figure is expected to reach 72 percent by end-2016. • Although the penetration of Non-Smartphones is expected to decline, the overall installed base is likely to increase to 991 million by end-2016, as compared to 785 million as of end-2011. • The share of the fast growing ME&A region in the global Non-Smartphone installed base is estimated to go up from 15% to 18%. Figure 22: Mobile Installed Base Penetration by Type – Middle East & Africa (In Percent, End 2011 – End 2016F) 100% 12% 16% 19% 23% 25% 28% 84% 81% 77% 75% 72% 2012E 2013F 2014F 2015F 2016F Penetration (In Percent) 80% 60% 40% 88% 20% 0% 2011 Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast © 2013, Portio Research. All Rights Reserved 23
  • 24. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Chapter 3 Mobile Installed Base – Saudi Arabia 24 © 2013, Portio Research. All Rights Reserved
  • 25. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Mobile Installed Base – Saudi Arabia Figure 23: Non-Smartphone Installed Base – Saudi Arabia (In Million, End 2011 – End 2016F) Decline Phase Non Smartphone Installed Base (In Million) 30 25 20 15 28 24 10 20 16 5 13 11 0 2011 2012E 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. E – Estimated , F – Forecast The Non-Smartphone installed base in the country is expected to decline continuously during the period 2011-2016. As of end-2016, close to 11 million subscribers in the region are expected to use a NonSmartphone, compared to 28 million as of end-2011. On the other hand, the Smartphone installed base in the country is expected to increase at a CAGR of 16 percent during the period 2011-2016, reaching 55 million by end-2016, up from 26 million as of end-2011. Figure 24: Smartphone Installed Base – Saudi Arabia (In Million, End 2011 – End 2016F) 60 Smartphone Installed Base (In Million) CAGR = 16% 50 40 30 20 10 46 40 26 55 51 33 0 2011 2012E 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. E – Estimated , F – Forecast © 2013, Portio Research. All Rights Reserved 25
  • 26. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 25: Contribution to Regional Non-Smartphone Base – Saudi Arabia (In Percent, End 2011 – End 2016F) Decreasing Share 4.0% Contribution (In Percent) 3.0% 2.0% 3.5% 2.8% 1.0% 2.2% 1.8% 1.4% 1.1% 2015F 2016F 0.0% 2011 2012E 2013F 2014F Year Source: Portio Research Ltd. E – Estimated , F – Forecast The contribution of the market to both the regional Non-Smartphone installed base and regional Smartphone installed base will decline over the period 2011-2016. Figure 26: Contribution to Regional Smartphone Base – Saudi Arabia (In Percent, End 2011 – End 2016F) Decreasing Share 25.0% Contribution (In Percent) 22.0% 19.0% 16.0% 23.4% 21.0% 19.0% 17.2% 13.0% 15.7% 14.4% 10.0% 2011 2012E 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. E – Estimated , F – Forecast The figure below highlights the penetration of Smartphones and Non Smartphones in the country for the period 2011-2016. 26 © 2013, Portio Research. All Rights Reserved
  • 27. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 27: Mobile Installed Base Penetration by Type – Saudi Arabia (In Percent, End 2011 – End 2016F) 100% Penetration (In Percent) 80% 48% 58% 67% 60% 74% 79% 84% 21% 16% 2015F 2016F 40% 20% 52% 42% 33% 26% 0% 2011 2012E 2013F 2014F Year Non Smartphones Smartphones Source: Portio Research Ltd. E – Estimated , F – Forecast © 2013, Portio Research. All Rights Reserved 27
  • 28. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Chapter 4 Summary and Conclusion 28 © 2013, Portio Research. All Rights Reserved
  • 29. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Summary and Conclusion The figure below shows the mobile installed base for the year end-2011 and end-2016. NonSmartphone installed base will constitute around 64 percent of the worldwide mobile installed base at the end of year 2016. Figure 28: Mobile Installed Base – Worldwide (In Million, 2011 & 2016F) Source: Portio Research Ltd. F – Forecast The worldwide Non-Smartphone installed base for the period 2011-2016 is shown in the figure below. The base would witness a decline after 2014. It is expected that the number of Non-Smartphones in Asia Pacific at the end of year 2016 will exceed the entire worldwide Smartphone installed base. This highlights the importance of Non-Smartphones for all players in the mobile industry, and while the highgrowth Smartphone segment takes most of the headlines and most of the glory, this Non-Smartphone category cannot be ignored. © 2013, Portio Research. All Rights Reserved 29
  • 30. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 29: Non-Smartphones Installed Base Snapshot – Worldwide (In Million, 2011 - 2016F) Source: Portio Research Ltd. E – Estimated , F – Forecast The worldwide Smartphone installed base is shown in the figure below for the period 2011-2016. Figure 30: Smartphones Installed Base Snapshot – Worldwide (In Million, 2011 - 2016F) Source: Portio Research Ltd. E – Estimated , F – Forecast As of end-2016, Non-Smartphones are expected to continue to be an important category on account of the sheer size of the market. This highlights the fact that the players – VAS Vendors, MNOs and Handset Vendors – have to enlarge their product portfolio for both the Smartphone and NonSmartphone segments. 30 © 2013, Portio Research. All Rights Reserved
  • 31. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 31: Mobile Installed Base Trend – Worldwide (End 2011 – End 2016F) 100% 90% Non-Smartpone Penetration 80% 70% 60% 50% 40% 30% 20% Bubble Area represents Smartphone Installed Base Worldwide 10% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Smartphone Penetration 2011 2012E 2013F 2014F 2015F 2016F Source: Portio Research Ltd. E – Estimated , F – Forecast Figure 71: As Smartphone penetration increases, so Non-Smartphone penetration decreases, and the size of the worldwide Smartphone installed base grows. Smartphones are expected to dominate Europe post end-2015. This is shown in the figure below. © 2013, Portio Research. All Rights Reserved 31
  • 32. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 32: Mobile Installed Base Trend – Europe (End 2011 – End 2016F) 100% 90% Non-Smartpone Penetration 80% 70% 60% 50% 40% 30% 20% Bubble Area represents Smartphone Installed Base in the Region 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% Smartphone Penetration 2011 2012E 2013F 2014F 2015F 2016F Source: Portio Research Ltd. E – Estimated , F – Forecast Non-Smartphones are expected to be the dominant devices in the vast Asia Pacific region until after the end of 2016 and beyond. Figure 33: Mobile Installed Base Trend – Asia Pacific (End 2011 – End 2016F) 100% 90% Non-Smartpone Penetration 80% 70% 60% 50% 40% 30% 20% Bubble Area represents Smartphone Installed Base in the Region 10% 0% 0% 5% 10% 15% 20% 25% 30% 35% Smartphone Penetration 2011 2012E 2013F 2014F 2015F 2016F Source: Portio Research Ltd. E – Estimated , F – Forecast In North America, Smartphones are expected to dominate after 2013, as shown in the figure below. 32 © 2013, Portio Research. All Rights Reserved
  • 33. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 34: Mobile Installed Base Trend – North America (End 2011 – End 2016F) 100% 90% Non-Smartpone Penetration 80% 70% 60% 50% 40% 30% 20% Bubble Area represents Smartphone Installed Bas in the Region 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Smartphone Penetration 2011 2012E 2013F 2014F 2015F 2016F Source: Portio Research Ltd. E – Estimated , F – Forecast Non-Smartphones are expected to be the dominant category in Latin America until after end-2016. Figure 35: Mobile Installed Base Trend – Latin America (End 2011 – End 2016F) 100% 90% Non-Smartpone Penetration 80% 70% 60% 50% 40% 30% 20% Bubble Area represents Smartphone Installed Base in the Region 10% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Smartphone Penetration 2011 2012E 2013F 2014F 2015F 2016F Source: Portio Research Ltd. E – Estimated , F – Forecast As shown below, Non-Smartphones will dominate in Middle East & Africa until after end-2016. © 2013, Portio Research. All Rights Reserved 33
  • 34. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Figure 36: Mobile Installed Base Trend – Middle East & Africa (2011-2016F) 100% 90% Non-Smartpone Penetration 80% 70% 60% 50% 40% 30% 20% Bubble Area represents Smartphone Installed Base in the Region 10% 0% 0% 5% 10% 15% 20% 25% 30% 35% Smartphone Penetration 2011 2012E 2013F 2014F 2015F 2016F Source: Portio Research Ltd. E – Estimated , F – Forecast 34 © 2013, Portio Research. All Rights Reserved
  • 35. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Chapter 5 Appendices © 2013, Portio Research. All Rights Reserved 35
  • 36. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Appendices This market study has been written in a way that avoids excessive use of market acronyms (except where appropriate) and industry technical talk, as we have tried to keep the text open to all readers, not just those with in-depth knowledge of the world’s mobile markets. Because this study covers all geographical regions and many emerging markets, a great deal of the data contained within this study will potentially be of interest to investors, financial analysts, consultants, venture capitalists and others all around the world who do not work within the mobile industry itself every day of their lives. To many of these people, some of the industry technical talk and acronyms may be confusing, so we have attempted to write this study in a self explanatory way that assumes little prior knowledge, but in doing this, some of the speech chosen may seem somewhat "obvious" to our more knowledgeable readers. We hope this offers the best possible solution to everyone, and we hope this does not cause any confusion or inconvenience. Where we have used technical terms or acronyms, we offer an explanation of those expressions below. 36 © 2013, Portio Research. All Rights Reserved
  • 37. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Glossary 3G or third generation 3G is an International Telecommunication Union (ITU) specification for the third generation (analog cellular was the first generation and digital PCS 1 was the second generation) of mobile communication technology. Third generation Wireless Wide Area Networks (WWAN) communication systems are characterised by high-speed data rates (144 Kbps 2 to 2+ Mbps 3) suitable for multimedia content. 3G technologies typically are packet-switched and use Code Division Multiple Access (CDMA) technology to communicate. Examples of 3G include EDGE 4, 1xRTT, HDR and W-CDMA. 5 3G protocols in mobile telephony support higher data transmission rates, measured in Mbps, intended for applications other than voice. 3G support broadband and bandwidth applications, such as fullmotion video, video conferencing and Internet access. 3G as a Percentage 3G as a percentage refers to 3G subscribers as a percentage of total active mobile subscribers in a country. This represents the proportion of 3G subscribers in the total mobile subscriber base of a country. 3G Penetration 3G penetration refers to 3G subscribers as a percentage of total population of the country. This is similar to the term ‘mobile penetration’, which means total number of active mobile subscribers in a country as a percentage of total population of the country. 4G or fourth generation 4G or fourth generation WWAN communication systems are characterised by high-speed data rates at 20+ Mbps, suitable for high-resolution movies and television. The initial deployment of 4G communication systems is expected in 2006-2010. The proposed features of these systems include 100 Mbps speed, location sensing and self-tailoring to user needs. A2P Application-to-Peer: In the mobile messaging world A2P messages are defined as messages generated by an application and sent to subscribers, for example, the advertisements sent through SMS/MMS on subscribers’ handsets. AAC Advance Audio Coding: It is an advanced audio compression algorithm used for downloading music files, streaming video, audio and satellite-radio applications. Admission Control Admission control is the means for controlling mobile data traffic at times of overload. Admission control finalises the data calls that have to be accepted in the network to maximise revenues, while maintaining QoS for all the other services. Application Programming Interface (API) It is an interface implemented by a software program to communicate with other software. Operating systems and applications use API to determine the way to call or send requests to other software. 1 Personal Communications Service (PCS) Kilobits per second (Kbps) 3 Megabits per second (Mbps) 4 Enhanced Data for Global Evolution (EDGE) 5 Wideband Code Division Multiple Access (W-CDMA) 2 © 2013, Portio Research. All Rights Reserved 37
  • 38. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Augmented Reality (AR) Augmented reality is the superimposition of virtual content over the real time environment. Virtual content includes digital graphics, audio and other sense enhancements, which are augmented to the real world by an AR device. Average Revenue per User (ARPU) Measures the average monthly revenue generated for each customer unit, such as a handset or pager that an operator has in operation. Backhaul It refers to the process of transmitting voice and data traffic from a remote site to a central site. BWA Broadband Wireless Access: It is a form of fixed wireless access system. Byte Byte is a collection of bits in which each bit can take a value of either 1 or 0. Kbps, Mbps and Gbps denote the number of bytes transferred per second; Kbps, Mbps and Gbps translate to 103, 106 and 109 bytes per second respectively. CDMA Code Division Multiple Access: In a CDMA system, each voice circuit is labelled with a unique code and transmitted on a single channel simultaneously along with many other coded voice circuits. The receiver uses the same code to recover the signal from the noise. CDMA2000 1x CDMA2000 1x: This is regarded as the first phase of CDMA2000 technology used for providing voice and data services over mobile networks. Data speeds of 307kbps are using a single channel while with two channels speeds of 614kbps are possible. Churn Rate It is the rate at which the subscribers cancel their subscription with the existing operator and sign up with another operator. Cloud Computing Cloud computing is a technology involved in delivering hosted services on the Internet. It is based on client-server architecture, which includes user device with applications (such as Web browsers) to access the back end (various components, such as data storage devices, servers, etc.). The back end components perform specific tasks and interact with each other through standard application programming interfaces. Desktop Penetration Desktop penetration refers to the number of desktops (PCs) as a percentage of the total population of the region. Dongle Dongle is a portable device which is connected to a laptop or desktop and resembles a USB flash drive. It is widely used as a wireless broadband adapter. DSL Digital Subscriber Loop: It is a technology that provides digital data transmission over the copper lines of a PSTN network. Dumb Pipes Dumb pipe refers to a mobile operator’s wireless network being used only to transfer data/bytes between the Internet and the user’s device. For an operator being a dumb pipe, there is a potential loss 38 © 2013, Portio Research. All Rights Reserved
  • 39. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia of revenue for the operator, since the operator is generating revenue only for the network data access and is not receiving any significant share in data/content service revenue. E-UTRA Evolved Universal Terrestrial Radio Access (E-UTRA) was used in the 3rd Generation Partnership Project’s (3GPP) early drafts of LTE specification for Evolved UMTS Terrestrial Radio Access Network (eUTRAN). It is the air interface of the LTE network which will replace the earlier technologies like UMTS, HSDPA, HSUPA for radio access network. It uses orthogonal frequency-division multiplexing (OFDM), multiple-input multiple-output (MIMO) antenna technology for downlink to support more users, higher data transfer rates and lower power requirement for the handsets. For uplink, OFDM and Single Carrier Frequency Division Multiple Access (SC-FDMA) is used depending on the channel to compensate for high peak to average power ratio associated with normal OFDM. This facilitates the key features of high data transfer rates, low latency and optimisation for packet data. EDGE Enhanced Data rates for Global Evolution: An enhanced modulation technique designed to increase network capacity and data rates in GSM networks. EDGE should provide data rates up to 384 Kbps. EDGE will let operators without a 3G license compete with 3G networks offering similar data services. EV-DO Evolution Data Only, Evolution Data Optimised: It is a wireless radio broadband data protocol being adopted by many CDMA operators. It is being used as a part of CDMA2000 networks in Japan, Korea, the United States and Canada. It provides better data speeds in comparison to GSM technologies such as GPRS and EDGE. Facebook Penetration It is the Facebook user base expressed as a percentage of the total population of the country. FDMA Frequency Division Multiple Access is a channel access protocol that allows a user dedicated allocation to single or multiple frequency bands. Feature Phone Feature phones are handsets with browsers (primarily based on embedded J2ME and BREW platforms) to enable access to web based e-mail, and sometimes have embedded applications for social networking, instant messaging (IM) and mobile banking. These phones often come with high resolution cameras, GPS and innovative multimedia features. The major differentiating factor between a smartphone and a feature phone is that feature phones do not have an open Operating System (OS). The OS present in smartphones, through its Application Programming Interface (API), enables subscribers to install and remove third-party applications. Smartphones are better integrated with the handset's User Interface than Java applications. Freemium Freemium is a strategy adopted by application stores in which trial or lite versions of premium apps are offered for free or for a small charge; and users have an option to upgrade the apps with additional features by paying additional charges. Gbps Please see “Byte”. GPRS General Packet Radio Service (GPRS) is a packet-based standard for mobile communication, which runs at speeds up to 115 kilobits per second, compared with GSM systems' 9.6 kilobits per second. GPRS supports a wide range of bandwidths and makes efficient use of limited bandwidth. It is particularly suited for sending and receiving small bursts of data, such as e-mail and web browsing, as well as large volumes of data. © 2013, Portio Research. All Rights Reserved 39
  • 40. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Applications for GPRS may include any of the following: chat, text and visual information, still images, moving images, web browsing, document sharing/collaborative working, audio, job dispatch, corporate e-mail, Internet e-mail, vehicle positioning, remote Local Area Network (LAN) access, file transfer or home automation. GSM Global System for Mobile communications, the most widely used digital mobile phone system and the mobile telephone standard in Europe. It was originally defined as a pan-European open standard for a digital cellular telephone network to support voice, data, text messaging and cross-border roaming. GSM is now one of the world's main 2G digital wireless standards. GSM is present in more than 160 countries and according to the GSM Association, accounts for approximately 70 percent of the total digital cellular wireless market. GSM is a time division multiplex (TDM) system. Implemented on 800, 900, 1800 and 1900 MHz frequency bands. GUI Graphical User Interface (GUI) is the front-end interface and navigation design of an application. This includes standard formats for representing text and graphics. GUIs have become the standard ways for interaction between users and digital devices. HARQ Hybrid Automatic Repeat Request is a process of ensuring data transmission even in poor signal conditions with an adverse effect of lowering the throughput in better signal conditions. It does so by error-correction in addition to error detection in the transmitting bits. HSPA High Speed Packet Access comprises two mobile protocols: High Speed Downlink Packet Access (HSDPA) and High Speed Uplink Packet Access (HSUPA). These protocols enhance the performance of WCDMA protocols. i-mode i-mode is a proprietary packet-based information service for mobile handsets. It delivers information (such as mobile banking, and train timetable) to handsets and enables exchange of e-mail from mobile handsets on the PDC-P network. Launched in 1999 by NTT DOCOMO, i-mode is very popular in Japan (especially for e-mail and transfer of icons). IMPS IMPS (Instant Messaging and Presence Service) is an instant messaging system designed for mobile environments. Presence refers to the availability of a user for communication. IMS IMS IP Multimedia Subsystem is an extension of the GSM / 3GPP GPRS core Network. It uses SIP (Session Initiation Protocol) to set up, maintain and terminate packet-switched voice and multimedia sessions. Interoperability This is defined as the ability of a network to operate with other networks, such as two systems based on different protocols or technologies. In-app Payment In-app payment is the payment made by mobile user to get privileged features, services or digital goods while using mobile apps. The privileged feature may be moving from a free or lite version of an app to the full version. Instant Messaging (IM) Instant Messaging is an Internet-based service that alerts users when their friends or colleagues are online and allows them to communicate with each other in real-time through private online chat areas. With instant messaging, users create a list of other users with whom they want to communicate. When 40 © 2013, Portio Research. All Rights Reserved
  • 41. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia a user from their list is online, the service alerts them and enables an immediate contact with the other user. While instant messaging has primarily been a proprietary service offered by Internet service providers such as AOL and MSN, businesses are starting to employ instant messaging to increase employee efficiency and make expertise more readily available to employees. Kbps Please see “Byte”. LTE Long-Term Evolution (LTE) is the standard being developed by 3GPP to achieve download rates of 100Mbps, and upload rates of 50Mbps for every 20MHz of spectrum and is termed as a 4G standard. LTE has support for bandwidths ranging from 1.25MHz to 20MHz. M2M Machine-to-Machine: M2M generally means the communication between machines. However, in the mobile world, it is sometimes defined as Mobile-to-Mobile, which basically refers to communication that involves only mobiles and not landlines. MAN Metropolitan Area Network is a computer network that normally encompasses a city or a big premise. It is formed by connecting several local area networks. Mbps Please see “Byte”. Megabyte 6 Megabyte translates to 10 bytes. Please see “Byte” for further details. MiFi MiFi is a collection of wireless routers that are used as mobile Wi-Fi hotspots. The technology is developed by Novatel Wireless. MNO Mobile Network Operator. MNO market penetration It is the mobile subscriber base of an MNO expressed as a percentage of total population of the country of operation. Mobile E-Mail Penetration Mobile E-mail Penetration is described as mobile e-mail users (of the specified market or region) as a percentage of the specified market or region’s mobile subscriber base. Mobile IM Penetration Mobile IM Penetration is described as mobile IM users (of the specified market or region) as a percentage of the specified market or region’s mobile subscriber base. Mobile Internet Penetration Mobile Internet Penetration is described as mobile Internet users (of the specified market or region) as a percentage of the specified market or region’s mobile subscriber base. Mobile penetration It is the mobile subscriber base in a country expressed as a percentage of its total population. © 2013, Portio Research. All Rights Reserved 41
  • 42. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia MVNO Mobile Virtual Network Operator: Term used for a mobile operator who does not own its own spectrum and usually does not have its own network infrastructure. Instead, MVNOs have business arrangements with traditional mobile operators to buy minutes of use (MOU) for sale to their own customers. Native Apps Native apps are mobile applications developed specifically to run on a particular operating system or device. Near Field Communication Near Field Communication (NFC) is a wireless communication technology which uses short-range high frequency to enable the exchange of data between devices in proximity with each other. The distance between the communicating devices has to be less than 10 centimetres. NFC-capable devices can communicate with smartcard readers as well as other NFC-capable devices. OFDMA Orthogonal Frequency Division Multiple Access is an advancement of Orthogonal Frequency Division Multiplexing to support mobile networks with more flexibility. Subsets of the subcarriers are assigned to individual users to facilitate multiple access. OMA-IMPS Open Mobile Alliance-Instant Messaging and Presence Service: It is an open mobile alliance enabler for instant messaging and presence. The first cut of this specification was developed by the Wireless Village consortium. Over-the-Top Services Over-the-Top services refer to those services which are available to users over mobile networks without MNOs being involved in planning, provisioning and selling them. Within the mobile industry, OTT services are interchangably referred to as next generation services. Packet Data Packet data is a method of transmitting information in small packets each containing a certain amount of the information. Packet data networks allow transmission of high-speed data to and from devices connected to the network. Packet Data is similar to dial-up Internet access available in homes or in businesses with cable modems, ADSL 6 lines, etc. P2P Peer-to-Peer: In the mobile messaging world, P2P messages are defined as messages exchanged between subscribers. These messages originate from and terminate to mobile subscribers’ handsets. PDA Personal Digital Assistant: A portable computing device capable of transmitting data. This device makes possible services such as paging, data messaging, electronic mail, computing, facsimile, date book and other information handling capabilities. Petabyte 15 Petabytes translate to 10 bytes. Please see “Byte” for further details. PIM Personal Information Manager: Also known as a "contact manager," is a form of software that logs personal and business information, such as contacts, appointments, lists, notes, occasions, etc. QoS QoS stands for quality of service. 6 Asymmetric Digital Subscriber Line (ADSL) 42 © 2013, Portio Research. All Rights Reserved
  • 43. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia RAN Radio Access Network: It is a component that exists between the mobile handset and the core network. It performs the radio functionality of the network and provides connection to the core network. RCS-e Rich Communication Suite enhanced (RCS-e) is an upgrade to Rich Communication Suite (RCS). It enables MNOs to deliver innovative and media rich services, such as instant messaging, live video sharing and file transfer, to its mobile subscribers. It will provide added opportunity for mobile subscribers to communicate with each other as it will be interoperable between MNOs’ networks and various devices. RFID Radio frequency identification (RFID) denotes a system employed to convey a unique serial number using radio waves. It does not require contact or line of sight for communication. An example of the deployment of this technology is in electronic toll collection using RFID tags. SC-FDMA Single-carrier frequency-division multiple access (SC-FDMA) facilitates multiple access schemes and is used for assigning multiple users to a shared communication resource. While in OFDMA, subsets of the subcarriers are assigned to individual users to assist multiple access schemes, SC-FDMA enables a single-carrier transmission scheme. SDK Software Development Kit is a set of tools used for the development of an application for a software package. Service Revenue Service revenues are the revenues earned by MNOs through the provision of services only, i.e. revenues after deducting revenues earned from sales of equipment/products. SIM card It is a smart card that gives GSM handset its user identity. The card is inserted into a GSM/TDMA or GSM-only mobile handset containing subscriber-related data. The card contains 18 digits code for GSM markets and 20 digits code for TDMA markets. SIMPLE SIMPLE (Session Initiation Protocol for Instant Messaging and Presence Leveraging Extensions) is an open standard instant messaging (IM) protocol. SIP Session Initiation Protocol or SIP is a standard multimedia and telephony protocol for initiating an interactive user session over mobile networks. The services under SIP may include call forwarding, number delivery, authentication and other telecoms applications. Smartphone A smartphone is a mobile handset which runs on operating system (OS) software and offers some of the capabilities of a PC. It provides a standardised interface and platform for application developers and is enabled with advanced features, such as e-mail, Internet and an e-book reader. Some of the other features expected from a smartphone include built-in full keyboard/external USB keyboard, powerful microprocessors, memory, built-in modem and large screens. The major differentiating factor between a smartphone and a feature phone is that an open Operating System (OS) is present in a smartphone. The OS, through its Application Programming Interface (API), enables subscribers to install and remove third-party applications. Smartphones are better integrated with the handset's User Interface than Java applications. © 2013, Portio Research. All Rights Reserved 43
  • 44. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Smartphone Penetration Smartphone penetration is described as smartphone users (of the specified market or region) as a percentage of the specified market or region's mobile subscriber base. SMS TV This is defined as the use of SMS for variety of applications, such as voting, teletext chat for TV programmes. SMSC Short Message Service Centre (SMSC) provides the routing of all SMS or text messages in any mobile network. Similar to e-mail server, the SMSC handles large volumes of messages sent between two mobile handsets or a mobile handset and a software application. TDD Time Division Multiplex: This is a scheme for allowing simultaneous transmission and receiving of data at the same frequency, but with the different time slots allocated to them. TDMA Time Division Multiple Access: A TDMA channel is a single FDMA channel divided up in time into multiple time slots. TDMA system is able to transmit multiple voice circuits per channel. Three users can take it in turn to share one radio channel. The channels can vary in bandwidth and depending on the type of system, the time slots can transmit all or part of a voice circuit. Each user's speech is stored, compressed and transmitted as a quick packet, using controlled time slots to distinguish them-hence the phrase 'time division'. It uses 30 KHz channels and a vocoder rate of 8 Kbits/sec. At the receiver, the packet is de-compressed. TD-SCDMA Time Division Synchronous Code Division Multiple Access: It is an air interface used in UMTS mobile telecommunications networks. It has been deployed in China to replace W-CDMA technology. UMTS Universal Mobile Telecommunications System: This is the future transmission network for third generation mobile telephones, as defined by the International Telecommunications Union (ITU). In time, UMTS could reach transmission capacities of 2 Mbits/sec. (compared to 9.6 Kbits/sec. for GSM). Initially UMTS will offer rates of 144 to 384 Kbits/sec. This standard will make the development of new multimedia services having very wide bands and new uses, notably in the transmission of video, images and sound possible. UMTS FDD Universal Mobile Telecommunication System (UMTS) Frequency Division Duplex (FDD): It is designed to generate typical data transfer rates of up to 384 Kbps and is suitable for wide area coverage due to potentially high reach. UMTS TDD Universal Mobile Telecommunication System (UMTS) Time-Division-Depleting (TDD): UMTS TDD Mobile Broadband technology is a packet data implementation of the international 3GPP UMTS standard and is designed to work in a single unpaired frequency band. It is designed to generate typical data transfer rates of up to 2 Mbps. USB Universal Serial Bus is a specification used to initiate data transfer between devices and a host controller. USSD Unstructured Supplementary Service Data (USSD) is a standard for transmitting information over GSM networks. It is primarily used to access the information on prepaid balances and similar details. 44 © 2013, Portio Research. All Rights Reserved
  • 45. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia UTRA-FDD Universal terrestrial radio access–frequency division duplex (FDD) refers to paired frequencies in which the transmitter and receiver operate simultaneously but at different frequencies UTRA-TDD Time division duplex (TDD) refers to unpaired frequency which is shared between uplink and downlink data rates VAS Mobile operators offer various services which are not part of the basic voice offer. These services are availed off separately by the mobile subscribers. It includes services such as SMS, MMS, mobile email, mobile games, mobile music etc. These also include services such as WAP, voicemail, call diversion, etc. Vertical Devices Vertical devices are smartphones optimised to run mobile enterprise applications and are particularly useful for a mobile work fleet. These devices are designed to provide high-bandwidth data collection and enable employees to access and update enterprise databases in a real-time environment. Aside from powerful processors, vertical devices are often enabled with capabilities such as a bar code scanner, digital camera, and two-way radio. Voice over Internet Protocol Voice over Internet Protocol (VoIP) is an Internet service which enables voice communication over IP network. This uses a set of communication and transmission protocols. WAP Wireless Advance Protocol: WAP is a specification for a set of communication protocols to standardise the way mobile devices, such as handsets and radio transceivers, can be used for Internet access. The WAP standard is based on Internet standards (HTML, XML and TCP/IP). It consists of a Wireless Markup Language (WML) specification, a WMLScript specification, and a Wireless Telephony Application Interface (WTAI) specification. The WAP protocol is the leading standard for information services on wireless terminals such as digital handsets. Some examples of WAP for accessing information include the following: checking train timings, purchasing tickets, flight check-in, viewing traffic information, checking weather conditions, looking up stock values, looking up phone numbers, looking up addresses or looking up sport results, and there are countless more. W-CDMA Wideband Code Division Multiple Access: The third generation standard offered to the International Telecommunication Union by GSM proponents. This is a 3G technology that increases data transmission rates in GSM systems by using CDMA instead of TDMA. W-CDMA has become the Direct Sequence mode in the ITU's 3G specification which includes the 1x Multi-Carrier mode (1x MC) and 3x Multi-Carrier mode (3x MC). 1x MC (formerly known as cdma2000) and 3x MC comprise the 3G upgrade paths for operators already using CDMA. WiBro Wireless Broadband: The technology was formulated by South Korean telecom industry as an equivalent to mobile WiMAX international standard. Wi-Fi Wireless Fidelity: It is used to provide wireless local area network through enhanced interoperability of the network. Services such as Internet, VoIP phone access, and gaming, etc., can be provided using Wi-Fi. © 2013, Portio Research. All Rights Reserved 45
  • 46. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia WiMAX Worldwide Interoperability for Microwave Access: It is a telecommunication technology used for wireless data transfer over long distances through point-to-point links as well as mobile cellular type access. It is based on standards that are useful in wireless broadband access. Wireless MAN Wireless Metropolitan Area Network: The technology is used to provide wireless network over a larger area as compared to local area network. WLL Wireless Local Loop: It refers to the wireless devices that are situated in fixed locations. The signal transmissions occur through the air and it provides connectivity to the users in remote and isolated areas without the need for laying new cables. XMPP Extensible Messaging and Presence Protocol is a real-time, open-standard communication protocol. It is based on Extensible Markup Language (XML) and is used for message-oriented middleware. The open system approach makes it interoperable with other applications. 46 © 2013, Portio Research. All Rights Reserved
  • 47. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Portio Research Classifications Geographical Regions: There is sometimes a difference in the way research firms classify the major geographical territories. At Portio Research, we follow 'obvious' geographical lines, but for the record, here are the regional definitions we follow, unless otherwise stated in the report: Western Europe: Standard classification includes Iceland and various islands Central and Eastern Europe: Includes standard list of Central and Eastern European countries, and the Baltic states, Balkans, Russia, Greece and Turkey Asia Pacific: Includes Australasia, the Indian Sub-Continent, Pakistan, Afghanistan, Sri Lanka, Maldives and the Former Soviet Union Central Asian republics North America: Standard classification, including Hawaii and islands to the North Latin America: Includes all South and Central American countries including Mexico, The Caribbean and The West Indies Middle East: Includes Israel and all Middle Eastern countries East of Egypt, South of Turkey and West of Afghanistan Africa: Standard classification includes territories in Western Indian Ocean Mobile Subscribers Generally, we count active SIMs, and we consider active as being used within 3 months, but, of course there is some room for variance, depending on what figures operators themselves publish or report to us when we interview them. When running spot-checks on operator numbers, we are governed by the figures they give us, and as we are all aware, many individuals and companies around the world count their subscribers/subscriptions by a number of different criteria. We refer to "total subscribers" for a network/country or globally, as a count of the total number of active subscriptions those networks have, and as such this can cause a slight distortion of any country-penetration rate. Currency and Monetary Values All monetary values quoted in this report are in US Dollars as the most widely recognised benchmark internationally. The currency conversion has been done on the year average basis. Whilst researching global mobile markets, we use http://www.oanda.com/ for all currency conversion calculations. © 2013, Portio Research. All Rights Reserved 47
  • 48. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia About the Authors Naresh Naresh has nearly a decade’s experience in the telecom, technology and media industry, working across several functions and businesses – ranging across technical hands-on experience, industry research and analysis, and new business models and product & service offerings for the b2b domain. He is a keen observer of trends, and has extensive modelling experience. He holds a bachelors degree in engineering, and a post graduate diploma in business management. Sam Gellar Sam is working as a Project Manager with Portio Research. He has worked on various projects related to telecom and media domain. He has over 6 years experience in telecommunications vertical primarily in data analytics and business research domain. He holds a bachelors degree in engineering and is currently a CFA Level II candidate. Anil Khurana Anil is working as a Project Lead with Portio Research. He has worked on various projects related to telecom and media domain. He has over 4 years experience in telecommunications vertical. He holds a bachelors degree in engineering. John White John White has been Editor and contributing author for this report. John is Business Development Director for Portio Research and has over 18 years experience in the technical publishing industry. Working in the IT sector previously and in the telecoms industry for the last 11 years, John has extensive experience in the mobile sector. 48 © 2013, Portio Research. All Rights Reserved
  • 49. Worldwide Mobile Installed Base 2012-2016 – Saudi Arabia Also available from Portio Research Limited Portio Research Ltd is a UK-based research company focussing on the mobile space, providing reports, handbooks, directories and database products. New and Best Selling Reports include: Smartphone Futures 2012-2016 The smartphone business has been the single biggest revenue generating growth-story over the last 4 years as the rest of the tech sector suffers amid this seemingly endless recession. Subscriber growth has slowed dramatically in saturated markets, voice and text have reach commodity pricing and margins are constantly squeezed hard under consumer pressure, yet around the world the appetite for new smartphones continues to gain pace. Continuing to redefine the handset business, smartphones are fast becoming the device of choice for hundreds of millions of consumers, and 2012 is the year that worldwide smartphone shipments will top half a billion in one year. In this report you will learn that smartphone shipments reached 485 million in 2011, and that number will top 655 million in 2012, rising to over 1 billion smartphones per year by 2016. Please click here for more details. Worldwide Mobile Industry Handbook 2012-2016 Your essential guide to understanding the size, scope and major players of the worldwide mobile industry. Serving as an invaluable guide for those in and outside the mobile space to enable better understanding of the worldwide mobile market, the third edition of this detailed and comprehensively updated handbook offers you all the essential market data required for business strategy and planning purposes, including: in-depth subscriber growth forecasts for leading countries, subscriber figures for key network operators across all major geographies, market share data, quarterly handset shipment figures, handset and infrastructure vendor profiles, analysis of popular handsets/smartphones, ARPU data, churn figures and so much more. This essential new 192-page market report will act as a touchstone to refer back to again and again for meetings, presentations and business plans. Please click here for more details. Mobile Messaging Futures 2012-2016 Analysis and Growth Forecasts for Mobile Messaging Markets Worldwide: 6th Edition Complete with groundbreaking five-year OTT user and traffic forecasts, the sixth edition of our best selling messaging report is now available to order. This new edition is packed with detailed market analysis, traffic and revenue forecasts, and comes with new sections on SMS hubbing, and mobile marketing and advertising. This massive 376-page market study gives you all the data you need for SMS, OTT messaging, MMS, mobile e-mail and mobile IM markets worldwide, and includes a BONUS Executive Summary presentation. With essential insight into the future of SMS and OTT within a wider market that will be worth USD 310 billion by end-2016, this is one of the most detailed and popular reports ever written on the worldwide mobile messaging market. Please click here for more details. If you have any questions or if we can be of any assistance to you, please contact us by e-mail: info@portioresearch.com Copyright 2013. Portio Research Limited 2013 www.portioresearch.com © 2013, Portio Research. All Rights Reserved 49

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